AMENDMENT NO. 1
TO
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
WELLSFORD/WHITEHALL PROPERTIES, L.L.C.
This AMENDMENT NO. 1 TO LIMITED LIABILITY COMPANY OPERATING
AGREEMENT is made and entered into as of December 31, 1997 by and between
WHWEL Real Estate Limited Partnership, a Delaware limited partnership
("Whitehall"), and Wellsford Commercial Properties Trust, a Maryland real
estate investment trust ("WCPT"). All capitalized terms used but not
otherwise defined herein shall have the meaning given to them in the
Original Agreement (as defined below).
R E C I T A L S
WHEREAS, Whitehall and WCPT entered into that certain Limited
Liability Company Operating Agreement of Wellsford/Whitehall Properties,
L.L.C., dated as of August 28, 1997 (the "Original Agreement"); and
WHEREAS, the parties hereto desire to amend the Original
Agreement to reflect certain modifications to the Original Agreement.
NOW, THEREFORE, in order to carry out their intent as expressed
above and in consideration of the mutual agreements hereinafter contained,
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby covenant and agree as
follows:
ARTICLE I.
AMENDMENT
Section 1.1 The following paragraph should be added to Section
6.2(f) immediately after Section 6.2(f)(vii):
(viii) The Members agree that in the absence of any
special allocations or adjustments to the Capital Accounts made
by the Internal Revenue Service, their respective Capital Account
balances (other than with respect to the preferred membership
units) should be in the ratio of their respective number of
Membership Units, and, accordingly, notwithstanding anything to
the contrary in Section 6.2(d), to the extent permissible under
Section s 704(b) and 514(c)(9) of the Code and the Treasury
Regulations promulgated thereunder, for purposes of maintaining
Capital Account balances, book income, gain and loss from the
sale of Company Assets shall be allocated, in a manner that
brings the Member's Capital Account balances into the ratio of
their respective number of Membership Units as quickly as
possible.
Section 1.2 Paragraph 8 of Exhibit A of the Original Agreement
is hereby deleted and is replaced in its entirety by Exhibit A attached
hereto.
Section 1.3 Paragraphs 3 and 12 of Section B of Exhibit E-3
of the Original Agreement are hereby deleted and are replaced in their
entirety by Exhibit B attached hereto.
Section 1.4 Section 2.9 of the Operating Agreement is
hereby supplemented by adding the following subparagraph to the end
thereof:
"(g) Notwithstanding anything to the contrary contained
herein, any capital or other expense necessary to remedy the
violations referred to in the Abatement Order described in
Schedule E3.9 to Exhibit E-3 (including, without limitation,
those certain capital expenditures in respect of 15 Broad Street
in the aggregate amount of $150,395.66 set forth in Schedule E3.5
to Exhibit E-3) shall be payable by, and shall be the
responsibility of, Whitehall. To the extent the Company pays any
such amounts, Whitehall shall promptly reimburse the Company
therefor without any increase in its Capital Account, Percentage
Interests or Membership Units."
Section 1.5 The parties hereby agree that, notwithstanding any
provision of the Operating Agreement, Closing Date Prorations shall occur
with respect to the Whitehall Additional Contributed Assets on the
Additional Closing Date, i.e., February 20, 1998.
ARTICLE II
Miscellaneous
Section 2.1 All references to the "Agreement" in the Original
Agreement shall be deemed to refer to the Original Agreement, as amended by
this Agreement.
Section 2.2 This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which when executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
Section 2.3 This Agreement, the Original Agreement, together
with all Exhibits, Schedules, and Annexes hereto and thereto and all letter
agreements executed by the Company, the Initial Members and/or their
respective Affiliates on the date hereof and the date of the Original
Agreement (which are incorporated herein and therein by this reference),
supersedes all prior agreements among the parties with respect to the
subject matter hereof and contains the entire agreement among the parties
with respect to such subject matter.
Section 2.4 The parties agree that the individuals executing
this Agreement on behalf of the Initial Members have done so in their
respective capacities as officers or trustees of the Initial Members (or,
in the case of Whitehall, its general partner) and not individually, and
none of the direct or indirect partners, trustees, officers or shareholders
of either Initial Member shall be bound or have any personal liability
hereunder. Each Initial Member shall look solely to the Interest of the
other Initial Member for satisfaction of any liability of such other
Initial Member in respect of this Agreement and will not seek recourse or
commence any action against any of the direct or indirect partners,
trustees, officers or shareholders of such other Initial Member or any of
their personal assets for the performance or payment of any obligation
hereunder. The foregoing shall also apply to any future documents,
agreements, understandings, arrangements and transactions between the
parties hereto.
Section 2.5 This Agreement shall be construed in accordance
with the laws of the State of Delaware, without regard to conflict of law
provisions thereof.
Section 2.5 Except as expressly set forth herein, all terms,
conditions and provisions of the Original Agreement shall remain unchanged
and in full force and effect and are ratified and reaffirmed in all
respects.
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SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
WHWEL REAL ESTATE LIMITED PARTNERSHIP
By: WHATR Gen-Par, Inc., General Partner
By: /s/ Stuart M. Rothenberg
---------------------------------------
Name: Stuart M. Rothenberg
Title: Vice President
WELLSFORD COMMERCIAL PROPERTIES TRUST
By: /s/ Edward Lowenthal
----------------------------------------
Name: Edward Lowenthal
Title: President
EXHIBIT A
CONTRIBUTION OF 15 BROAD AND 600 ATRIUM
TRANSACTION SUMMARY
In connection with the acquisition by Wellsford/Whitehall Properties,
L.L.C. (UWellsford/Whitehall") of the properties known as 15 Broad Street
and 600 Atrium, the following transactions will occur:
(i) Wellsford/Whitehall will borrow $6,000,000 under the Revolving
Credit Facility pursuant to the Revolving Credit Agreement by and
among Wellsford/Whitehall, BankBoston, N.A. and Goldman Sachs
Mortgage Company.
(ii) Wellsford/Whitehall will make a distribution to the Whitehall
Member in the amount of $3,983,076.
(iii) WHCB Real Estate Limited Partnership will distribute pro rata
undivided interests in the property known as 600 Atrium to Stone
Street Chemical Corp., Bridge Street Real Estate Fund 1996, L.P.,
Stone Street Real Estate Fund 1996, L.P., JER WHC-Six Services,
Inc., WHCB Gen-Par, Inc. and Whitehall Street Real Estate Limited
Partnership V ("Whitehall V"); Stone Street Chemical Corp.,
Bridge Street Real Estate Fund 1996, L.P., Stone Street Real
Estate Fund 1996, L.P., JER WHC-Six Services, Inc., WHCB Gen-Par,
Inc. and Whitehall V will contribute their respective undivided
interests in 600 Atrium to Wellsford/Whitehall. The foregoing
distributions and contributions will be made subject to the
existing financing secured by 600 Atrium and will be evidenced by
a deed from WHCB Real Estate Limited Partnership to
Wellsford/Whitehall.
(iv) WHTR Real Estate Limited Partnership will distribute pro rata
undivided interests in the property known as 15 Broad Street to
Stone Street Real Estate Fund 1994, L.P., Bridge Street Real
Estate Fund, 1994, L.P., Stone Street Administrative Corporation
I, JER WHC-Six Services, Inc., WHTR Investors, Inc. and Whitehall
V; Stone Street Real Estate Fund 1994, L.P., Bridge Street Real
Estate Fund 1994, L.P., Stone Street Administrative Corporation
I, JER WHC-Six Services, Inc., WHTR Investors, Inc. and Whitehall
V will contribute their respective undivided interests in 15
Broad Street to Wellsford/Whitehall. The foregoing transactions
will be made subject to the existing financing secured by 15
Broad and will be evidenced by a deed from WHTR Real Estate
Limited Partnership to Wellsford/Whitehall.
(v) In the aggregate, the contributions described in (iii) and (iv)
above represent a $3,983,076 capital contribution to
Wellsford/Whitehall (the "Contribution Interests"). Stone Street
Real Estate Fund 1994, L.P., Stone Street Administrative
Corporation I, Bridge Street Real Estate Fund 1994, L.P., Stone
Street Chemical Corp., Bridge Street Real Estate Fund 1996, L.P.,
Stone Street Real Estate Fund 1996, L.P., JER WHC-Six Services,
Inc., WHCB Gen-Par, Inc. and WHTR Investors, Inc. will contribute
the Contribution Interests to the Whitehall Member in exchange
for a $3,983,076 partnership interest in the Whitehall Member.
(vi) Wellsford/Whitehall will repay the existing financing secured by
600 Atrium and will pay the release price for 15 Broad Street.
(vii) The transactions described in (i) through (vi) above will occur
contemporaneously such that the existing financing on 15 Broad
Street and 600 Atrium will be repaid on the date such properties
are contributed to Wellsford/Whitehall.
EXHIBIT B
REPRESENTATIONS AND WARRANTIES CONCERNING THE ADDITIONAL
WHITEHALL PROPERTIES
3. Compliance with Laws. Except as set forth on Schedule E3.9,
to Whitehall's knowledge, each Whitehall Additional Current Owner is in
material compliance with all applicable laws and each of them has obtained
and complied with all material consents, approvals, permits and licenses of
governmental authorities required to conduct their respective businesses as
presently operated and such consents, approvals, permits and licenses have
not been terminated. Except as set forth on Schedule E3.9, no Whitehall
Additional Current Owner has received any written notice that it is not in
such compliance. Except as set forth on Schedule E3.9, each Whitehall
Additional Current Owner has delivered to WCPT true and complete copies of
all certificates of occupancy in its possession pertaining to all or any
portion of any Whitehall Additional Property.
12. Assessed Value. Except as set forth on Schedule E3.10, no
Whitehall Additional Current Owner has received any notice of, and
Whitehall does not know of, any proposed change in the assessed value of
all or any portion of any Whitehall Additional Property owned by such
Whitehall Additional Current Owner, other than the customary scheduled
increases in the state, county and city where such Whitehall Additional
Property is located, or such change as would not have a material adverse
effect on the owner of such Whitehall Additional Property. Except as set
forth on Schedule E3. 10, the Whitehall Additional Current Owners have not
received any written notice of any proposed or pending special assessments
which affect any Whitehall Additional Property or any portion thereof,
other than such special assessment that would not have a material adverse
effect on the owner of such Whitehall Additional Current Property.